So is sharing your Netflix password allowed? On June 2nd, 2011, Tennessee Governor Bill Haslam signed a bill that banned sharing passwords for Netflix, Hulu, Rhapsody, and any other subscription-based website. The bill, which was in effect on July 1st, 2011, was primarily targeted at hackers who steal usernames and password to subscription sites and sell them in bulk. However, ordinary subscribers who share their passwords with friends and family could also be subject to legal action. In a statement to the Associated Press, Rep. Gerald McCormick explained, “what becomes not legal is if you send your user name and password to all your friends so they can get free subscriptions.”
Violations involving less than $500 worth of entertainment are classified as misdemeanors; they are punishable by fines of $2,500 and up to one year in jail. The penalty for second offenses and violation involving entertainment valued above $500 is even steeper — and may involve a felony charge.
Many have said the new law is unnecessary. Jared Newman of PCworld even went so far as to say the law went against the nature of subscription-based websites. He also pointed out that websites like Netflix already have measures in place to keep many people from using the same password, including limiting the number of devices that can stream content from one subscription at once. Netflix agreed with him saying in a statement reported by Tom Cheredar of MediaBeat that “Netflix already has provisions in its Terms of Use that restrict passwords to the member’s household.”
But Tennessee lawmakers maintain that the bill is an important step in stopping piracy. Cheredar speculates that they were especially concerned with protecting the music industry because it has a sizeable presence in the state and has much to lose from pirating. But only time will tell what effect— if any — the law will have on the industry and consumer.
